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Franklin Prima Plus is close to completing 25 years of existence and has delivered an annualized return of 18.78% over that time period. One lakh rupees (lump sum) invested in the fund at inception would now be worth Rs 52 lakh. However Prima Plus isn’t India’s oldest mutual fund. That honour goes to UTI Mastershare which was launched in 1986, even before liberalization. This fund has delivered an equally powerful 18.07% since its inception. A Rs 1 lakh invested in the fund at inception would now be worth Rs 1.72 crore.

The table below gives you the performance of India’s oldest funds. All of the funds listed in it were launched in the 1990s and have delivered average annualised returns (barring one) of 18-20%. The performance figures illustrate the sheer power of staying invested with mutual funds over the long term.

Fund

Category

Inception Date

Age

Return since inception

UTI Mastershare

Equity – Large Cap

18th October 1986

31

18.07%

HDFC Prudence

Hybrid – Equity Oriented

1st Feb 1994

24

18.93%

Franklin Prima Plus

Equity – Multicap

29th Sept 1994

23

18.78%

HDFC Equity

Equity – Large Cap

1st Jan 1995

23

19.32%

Aditya Birla Sun Life Balanced 95 Fund

Hybrid – Equity Oriented

10th Feb 1995

23

20.73%

HDFC Top 200

Equity – Large Cap

3rd Sept 1996

21

20.26%

DSPBR Equity

Equity – Multicap

29th April 1997

20

20.39%

Tata Pure Equity (now Tata Large Cap Fund)

Equity – Large Cap

7th May 1997

20

21.06%

DSPBR Equity and Bond

Hybrid – Equity Oriented

27th May 1999

18

15.30%

ICICI Pru Long-Term Equity

Equity – Tax Saving

19th August 1999

18

21.09%

Source: Value Research, Data observed on 10th April 2018

It is interesting to note that the difference between different equity categories – large cap and multi-cap have been marginal over such long periods. This is also true to some extent of balanced (hybrid equity oriented) funds and pure equity funds. In other words, time in the market can smoothen out the differences in equity category performance, in the long run.

However before drawing any inferences, please note a few points:

These are largely equity funds. Debt funds do not give these types of returns, even over the long term.

The last twenty years may have been exceptional for India’s economy and markets. There is no guarantee that this kind of performance will repeat itself over the next 20 years. In the case of some funds, the maximum performance has happened prior to last 10 years.

HDFC Prudence has done 18.93% since inception while 14.44% in the last 10 years. UTI Mastershare has done 10.72% in the last 10 years versus 18.07% for the lifetime. The return on ICIC Prudential Long Term Equity Fund over the last 10 years is also significantly lower at 14.14% compared to returns since inception.